Cyprus Banks to Open Midday Tomorrow With Capital Restrictions

Cyprus’s banks will open for six hours tomorrow with capital restrictions in place after staying shut for almost two weeks as the island nation faced financial collapse.

Capital controls include a 300-euro ($383) daily limit on withdrawals and will restrict transfers to accounts outside Cyprus, according to a decree from the Central Bank of Cyprus. The decree will remain valid for four days, according to an e-mailed statement from the bank today.

“Please let’s all be calm and be careful not to create more problems,” Yiangos Dimitriou, head of the central bank’s audit department, said in comments broadcast on state-run CyBC. “It will serve no purpose for us to run to banks and try to find ways to get money. To get it where?”

Banks will open at midday tomorrow and shut at 6 p.m. local time, he said.

Cyprus’s lenders have been closed since a March 16 plan by the European Union to force losses on all depositors in exchange for a 10 billion-euro bailout touched off a political upheaval. While parliament rejected that plan, a subsequent agreement shuts Cyprus Popular Bank Pcl, the nation’s second-largest lender, and imposes larger losses on uninsured depositors.

The measures to be imposed include a ban on terminating time deposits and prohibit cashing checks. The restrictions aim to protect the country’s financial industry, while simultaneously trying to uphold as far as possible the principle of free movement of capital within the EU, Aliki Stylianou, a central bank spokeswoman, said today before the decree was published.